MUMBAI, Mar 19: The Unit Trust of India (UTI) has initiated talks with the State Bank of India (SBI) to provide an electronic clearing system (ECS) to its unitholders through its 55 offices in the country.This follows the recent decision of the Reserve Bank of India (RBI) to extend the ECS facility to an additional 8 centres, taking the tally of centres offering such services to 16.
This would still leave about 30-odd branches of UTI out of the purview of ECS, a system which allows the transfer of dividend to the accounts of unitholders electronically. The Trust has decided to extend the ECS facility to the repurchase and maturity benefit payment as well.
UTI has launched a massive campaign to expand the list of 25 lakh ECS accounts which have been opened by unitholders of US-64. The figure pales in comparison to the 200 lakh accounts that the Trust's Rs 20,000-crore flagship scheme otherwise has.
The Trust has planned a Rs 25-lakh ad blitz along with a direct mailing exercise to urge investors tothe US-64 scheme to shift to the ECS mode to eliminate fraudulent encashments of certificates and expedite the distribution of dividends and other payments.
"We plan to, through the SBI clearing system, connect all our branches through the ECS system in the next 6-8 months. Next year's dividends and other payments would be payed through electronic credit," said UTI executive director (systems and operations) AK Thakur.
Agents are being offered a cash incentive for bringing in investors to the ECS mode and all those who are nearing receipt of maturity benefits are also being approached individually ahead of June 30 which is the year-ending of Unit Trust.
"The response to ECS is growing fast. About 50 per cent of the fresh applicants to US-64 are opting for the facility. The number of accounts moving to ECS have grown 50 per cent over the past two years. But the figures need to increase rapidly if a bulk of unitholders of US-64 are to be covered under the facility," said Thakur.
"Once the US-64 unitsare available for dematerialisation and the ECS facility is up and running across all centres, we expect a drastic reduction in cases of loss in transit and fraudulent encashments," said Thakur."We expect all the modalities to be completed by April-end for admitting the US-64 units for dematerialisation," he added.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
